HIT Incentives: CMS Proposed Meaningful Use Rule and ONC Interim Final Rule on Standards and Certification

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1 HIT Incentives: CMS Proposed Meaningful Use Rule and ONC Interim Final Rule on Standards and Certification Ivy Baer, J.D., M.P.H. Director & Regulatory Counsel Lori Mihalich-Levin, J.D. Senior Policy Analyst

2 Understanding Meaningful Use AAMC Teleconferences: 2-3:30 ET January 25: Overview February 1: EP Issues February 4: Hospital Issues February 11: ONC Standards and Misc. Issues 2

3 A Little Background CMS and ONC rules published in Federal Register January 13, 2010 CMS: notice of proposed rulemaking ONC: interim final rule; effective date February 12, 2010, but changes are still possible Comments on both are due March 15, 2010 COMMENTS ARE IMPORTANT!! 3

4 Overview of Proposed Requirements Rules create 2 new CFR sections: 42 CFR 495 (CMS) 45 CFR 170 (ONC) 4

5 A Few Basic Rules Medicare and Medicaid rules: mostly consistent States choose whether to enter Medicaid incentive program EPs choose between Medicare & Medicaid One-time switch no later than 2014 Hospitals eligible for both Medicare & Medicaid 5

6 Generally, ARRA requires: For Meaningful Use : Using EHR technology in a meaningful manner, including e-prescribing Exchanging health information electronically to improve quality of care Reporting on clinical quality measures ARRA requires meaningful use measures to become more stringent over time 6

7 Stage 1 Decision Tree: Medicare INCENTIVE! (CMS)! YES YES Have you reported on EP/hospital quality measures (CMS)? NO: $0 YES Have you met /attested to measures of IT functionality (CMS)? NO: $0 YES Are you using certified EHR technology (ONC)? NO: $0 YES Are you a non-hospital based EP? NO: $0 7 Are you an eligible professional (EP)/ hospital? NO: $0

8 Are you an eligible professional? Medicare: Doctor of Medicine or Osteopathy Doctor of Dental Surgery Doctor of Optometry Chiropractor 8

9 Are you an eligible hospital? Medicare: Subsection (d) hospitals - i.e. hospitals in the 50 states and D.C. Not eligible: hospitals and hospital units that are excluded from IPPS o E.g., psychiatric, rehabilitation, long-term care, children s, and cancer hospitals 9

10 How does CMS propose to identify a hospital for payment? By Medicare provider number (CCN) Multi-campus systems will only receive one set of incentive payments 10

11 Are you non-hospital based? Statutory language regarding a hospital-based EP: An EP who furnishes substantially all of such services in a hospital setting (whether inpatient or outpatient) and through the use of the facilities and equipment, including qualified electronic health records, of the hospital. The determination... Shall be made on the basis of site of service and without regard to any employment or billing arrangement between the eligible professional and any other provider. 11

12 Site of Service Inpatient setting Hospital outpatient settings care furnished to registered hospital outpatients: Outpatient setting in main provider On-campus and off-campus provider based department of the hospital Entities having provider-based status 12

13 Site of Service Codes Look to place of service (POS) codes on physician claims: 21: Hospital inpatient 22: Outpatient hospital 23: Emergency room, hospital 13

14 Substantially all Defined as: Furnishing at least 90% of services in a hospital setting, either inpatient or outpatient Determination made annually based on EP s claims from prior year 14

15 How many hospital-based EPs? CMS estimates: 27% of Medicare EPs 12-13% of family practitioners under Medicare CMS concern: disincentive for hospitals to invest in outpatient EHR systems Future rulemaking: broader definition of hospital care to include outpatient services? 15

16 Are you using certified EHR technology? Ask: Does your EHR meet the standards and certification requirements in the ONC interim final rule? What s still missing? Regulation on PROCESS for certification (due out any day ), which will spell out: Policies for certifying EHRs How to become a certifying body 16

17 Illustrative Crosswalk Meaningful Use Objectives E-Rx Certification Criteria Capability to E-Rx must be included Standards NCPDP SCRIPT 8.1/10.6 must be used Provide Patient Summary Record Capability to electronically transmit a patient summary record must be included Continuity of Care Document (CCD) or Continuity of Care Record (CCR) must be used plus vocabulary standards Electronically Submit Data to Immunization Registries Capability to electronically transmit immunization data must be included HL or HL and CVX Code Set 17 Source: Office of the National Coordinator

18 ONC Standards: 4 Categories Content Exchange Standards currently available in most areas and future pathways fairly clear. Vocabulary Standards Several current standards adopted with vital signs, unit of measure and medication allergies left open until Transport Standards Include both REST and SOAP common exchange formats. Security and Privacy Standards adopt standards where best practices and requirements exist and left open standards where the industry will continue to innovate. 18

19 Certification Criteria Certified EHR Definition allows providers flexibility (e.g., may install combination of different EHR modules) Privacy and security criteria aligned with applicable HIPAA Security Rule requirements Certification Criteria is designed to support meaningful use Stage 1 19

20 Have you met IT functionality? CMS proposes 3 Stages of requirements: Stage 1: (details in this proposed rule) Capturing information in coded format Using that information to track key clinical conditions and communicating that information for care coordination Implementing clinical decision support tools Reporting clinical quality measures and public health information 20

21 Stage 2: (Proposed by end of 2011) Expand stage 1 criteria to encourage using health IT for quality improvement Exchange of information in most structured format possible Stage 3: (Proposed by end of 2013) Promote improvements in quality, safety, and efficiency Decision support for national high priority conditions Patient access to self-management tools Access to comprehensive patient data Improving population health 21

22 Stage 1 Highlights: EPs, 25 measures; Hospitals, 23 measures Yes/No Percentages Higher % for criteria based on capability; lower % if electronic exchange of information How to report? Attestation through secure mechanism Must meet all 25 (EPs) or all 23 (hospitals) 22

23 Baseline EP requirement: 50% or more of patient encounters during the reporting period at practice(s)/location(s) equipped with certified EHR technology 23

24 Yes/No Measures: 1. Implement drug-drug, drug-allergy, drugformulary checks 2. Generated at least 1 report of patients with specific condition 3. Implement 5 clinical decision support rules 4. One test of electronic exchange of key clinical information 5. One test of electronic data submission to immunization registry 24

25 Yes/No Measures (cont.) 6. One test of electronic submission of lab results to public health agencies (hospital only) 7. One test of electronic syndromic surveillance data to public health agency 8. Conduct or review security risk analysis and implement security updates 25

26 Other IT Functionalities Examples of measures requiring a numerator and denominator (all patients): 80% (EP) or 10% (hospital) of all orders entered using the CPOE functionality 75% of all permissible prescriptions transmitted electronically (EP only) 10% of all unique patients provided timely electronic access to their health information (EP); 80% of patients discharged from hospital given electronic copy of discharge instructions, if requested 26

27 Proposed Stages of Meaningful Use By Payment Year First Payment Payment Year Year for EP or Hospital ** 2011 Stage 1 Stage 1 Stage 2 Stage 2 Stage Stage 1 Stage 1 Stage 2 Stage Stage 1 Stage 2 Stage Stage 1 Stage * Stage 3 * Avoids payment adjustments only for EPs in the Medicare EHR Incentive Program. ** Stage 3 criteria of meaningful use or a subsequent update to the criteria if one is established Source: Federal Register, Table 1 (p. 1854) 27

28 Meaningful Use Reporting Periods? First payment year (i.e. 1 st year an EP or hospital receives payment): Any continuous 90-day period Subsequent payment years: Entire CY (EP) or FY (hospital) 28

29 29 Medicare Meaningful Use Reporting Period for CY or FY 2011:

30 Have you reported on quality measures? (Hospital and EP) How to report on quality? Calculate and attest to results 2012 Submit data through EHR Calculate and report numerator/denominator/exclusions for each measure Report on all patients irrespective of payor 30

31 EP Quality Reporting Measures Report core measures plus 1 specialty measures group CMS seeking comments on specialties to which none of the measure group apply Approximately 3-5 measures per specialty group 31

32 EP Quality Reporting Report Core Measures Core Measures (Tobacco Use, Blood Pressure, Drugs to be Avoid in the Elderly) AND Choose One Specialty Measure Group Cardiology Pulmonology Endocrinology Oncology Proceduralist/ Surgery Primary Care Pediatrics Ob/Gyn Neurology Psychiatry Opthalmology Podiatry Radiology Gastroenterology Nephrology 32

33 Hospital Quality Reporting Key Points: Must report on 35 quality measures (Stroke, VTE, ED throughput, Pneumonia, Infections, Readmissions) Electronic specifications available on or before April 2010 No duplication measures required for EHR incentive and current pay-for-reporting program must only be submitted once through EHR program Separate measure set for Hospitals reporting for Medicaid incentive 33

34 HHS OIG s 2010 Work Plan OIG will review CMS s oversight of implementation and management of Medicare and Medicaid EHR incentives Watch out for double-dipping: EPs eligible for only Medicare or Medicaid incentives Has CMS established fiscal oversight and reporting mechanisms to determine meaningful use? 34

35 E-Prescribing and EHR Incentive EPs or group practices who accept a payment from the Medicare E-Prescribing Incentive program (MIPAA) for a given year will not be eligible for an EHR incentive payment Participation in a Medicaid E-prescribing does not disqualify from the Medicaid EHR incentive payment 35

36 36 What happens when you qualify for a Medicare incentive?

37 How is the EP incentive paid? Rolling payments 90 days first year; full calendar year thereafter EP in more than 1 practice can only assign to one practice; if solely in a group practice will be paid to group s TIN For 10% HPSA bonus: More than 50% of services are in a HPSA for 1 CY period Bonus paid no later than 120 days after end of prior year 37

38 Significant Hardship Exception (EP) Regulations yet to be implemented Once granted, exception can be renewed annually, for no more than 5 years 38

39 CMS Estimates of MU in 2015 For Medicare EPs: Estimates subtract out 27% of EPs who are hospital-based Assume 20% will qualify for and choose Medicaid Low Scenario: 21% ($.5 billion in incentives) High Scenario: 53% ($1 billion in incentives) 39

40 What happens 2015 and after? Fee schedule reductions for EPs who do not achieve meaningful use: 2015: 1% 2016: 2% 2017 and after: 3% 2018 and after: if less than 75% of eligible professionals are meaningful users, further reductions possible, but cannot exceed 5% 40

41 Two Exceptions to EP Penalties Significant hardship on case-by-case basis if practice in rural area without sufficient internet access Hospital-based eligible professionals 41

42 Medicare Incentives to Hospitals Key Points: Hospitals are eligible for both Medicare and Medicaid incentives Maximum of 4 years of payments Penalties begin in 2015 Interim payments based on data from hospital FY ending during FY prior to HIT payment year Final payments determined at time of settling cost report for hospital FY ending during payment year 42

43 Medicare Incentives to Hospitals What is the hospital payment formula? [(Base amount + Discharge related amount) x Medicare share] x Transition factor 43

44 How are the Medicare hospital formula elements defined? Base Amount: $2 million Discharge Related Amount: $200 for each hospital discharge between 1,150 and 23,000 within 12 month period 44

45 Medicare Share: Numerator: total estimated Part A and C inpatient days Denominator: total estimated inpatient days adjusted to exclude any charges attributable to charity care Note: Use same method for counting inpatient bed days as you use for GME payments 45

46 Charity Care Charges: Use charges reported on Line 19 of revised Worksheet S-10 of the hospital cost report Final version of Worksheet S-10 not yet released Note: hospitals providing greater proportions of charity care receive higher EHR payments 46

47 Transition Factor First payment year: 100% Second payment year: 75% Third payment year: 50% Fourth payment year: 25% Any succeeding payment year: 0 If a hospital adopts an EHR after 2015, the transition factor is 0. 47

48 What are the penalties for hospitals if no MU by 2015? 75% of inpatient payment update at risk. 2015: 1/3 reduction (i.e. 25% of update) 2016: 2/3 reduction (i.e. 50% of update) 2017 on: full reduction (i.e. 75% of update) (Note: Remaining 25% of update based on successful quality reporting) 48

49 What year will CMS look to for data? (i.e. data on discharges, bed days, and charity care charges) Preliminary payments: o Hospital FY that ends during the FY prior to the FY that serves as the payment year Final payments: o Determined at time of settling cost report for hospital FY that ends during the payment year 49

50 CMS Use of Hospital Data Example: If hospital cost reporting year ends June 30, 2011, CMS will use data from cost reporting period ending June 30, 2010 for preliminary payments during FY Final payments will be based on data from settled cost report for cost reporting period ending June 30,

51 CMS Estimates of Total Hospital Medicare Incentives: Low Scenario: : $6.6 billion : $8.6 billion High Scenario: : $9.8 billion : $11.6 billion 51

52 Online Posting Website posting of EPs (individuals and groups), hospitals, and CAHs receiving incentive payments Eligible hospitals and CAHs will have opportunity to review the list before public posting 52

53 53 How do you qualify for Medicaid incentives?

54 What are the general differences between the Medicare & Medicaid incentives? State participation is optional No penalties States may add additional meaningful use objectives or change measurement of existing objectives Possibility of qualifying for incentives in CY or FY 2010, through adoption, implementation, and upgrade 54

55 Medicare Medicaid differences, cont.: EPs and hospitals must choose only one state Medicaid patient volume requirements data comes from any representative 90-day period in preceding calendar year 55

56 Adoption, Implementation & Upgrade Adoption: evidence provider actually installed EHR (efforts to install not sufficient) Implementation: provider installed and started using certified EHR in clinical practice; includes staff training, data entry of patient demographic/admin data, establishing data exchange agreements Upgrade: expansion of EHR functionalities (e.g. addition of decision support, CPOE) 56

57 EPs: Medicare vs. Medicaid Eligible professional Medicare Physician, (medicine or osteopathy), dentist, podiatrist, optometrist, chiropractor Medicaid Physician, dentist, certified nurse mid-wife, nurse practitioner, physician assistant in RHC or FQHC Max incentive amount $44,000 $63,750 Maximum amount first payment year $18,000 ( ) $15,000 (2013) $12,000 (2014) $21,250 ( ) To earn incentive for first payment year Must meet all meaningful use criteria Adopt, implement, or upgrade Year penalties begin 2015 No penalties Maximum number of years can receive payment

58 Medicaid EPs Not hospital-based (same definition as Medicare) 30% of all patient encounters: Medicaid 2 exceptions: Pediatrician: 20% Medicaid (incentive reduced by 2/3 rds if less than 30%) Medicaid EPs practicing predominantly in FQHC or RHC: minimum 30% patient volume attributable to needy individuals 58

59 Medicaid: Needy Individuals Medicaid or CHIP; Provider furnished uncompensated care; or Services at no or reduced cost based on individual s ability to pay 59

60 EP Medicaid Payment Methodology Cap for EPs: 85% of net average allowable costs to implement and use EHR technology $25,000 net average allowable cost first year $10,000 net average allowable cost for 5 subsequent years 60

61 EP Medicaid Example: Cost of EHR 1 st year: $54,000 less Money from other sources (not gov t): $29,000 Total: $25,000 Incentive: 85% of $25,000 = $21,500 61

62 Which hospitals are eligible for Medicaid incentives? Acute Care Hospitals with 10%+ Medicaid Patient Volume Average length of patient stay < 25 days Hospital with a CCN last four digits between 0001 and 0879 (i.e. short-term general hospitals and the 11 cancer hospitals) Children s Hospitals of Any Medicaid Patient Volume Separately certified institution With a CCN with last four digits between 3300 and

63 Medicaid Incentives to Hospitals Deeming for Meaningful Use: Hospitals that are meaningful users for Medicare EHR incentives are deemed meaningful users for Medicaid So what? Means that deemed hospitals won t have to meet any state-specific, additional meaningful use requirements 63

64 Medicaid Incentives to Hospitals Medicaid payment formula same as Medicare formula, with these exceptions: Medicaid share uses Medicaid data May begin receiving payments as late as 2016 For charity care charges, States may use cost report Worksheet S-10 or another auditable data source 64

65 Medicaid Incentives to Hospitals Differences from Medicare, cont.: Need to calculate an aggregate EHR incentive payment (because states may make payments over 3-6 years) Aggregate payment assumes four years of payments Average annual growth rate used to estimate discharge data No payment may exceed 50% of aggregate Payments over 2 years may not exceed 90% of aggregate 65

66 66 Questions?

67 Helpful HIT Web Resources: ONC: CMS: AAMC: FACA Blog: 67

68 Interested in more frequent updates? Join our Health IT list serv by sending a blank (leave the subject line and body blank) to (You will receive a confirmation to confirm your subscription; please respond to this as instructed in the message or your subscription will not be complete.) 68

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